Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water Co.

United States Court of Appeals, Seventh Circuit532 F.2d 572 (1976)

Facts

Pittsburgh-Des Moines Steel Co. (PMD) (plaintiff) is a manufacturer of steel and steel structures. PMD submitted a proposal to construct a steel tank for Brookhaven Manor Water Co. (Brookhaven) (defendant) for a price of $175,000. PMD requested progress payments throughout construction, with the final purchase price due from Brookhaven before PMD completed construction of the tank. Brookhaven rejected this proposal. Brookhaven and PMD ultimately agreed that the purchase price would be due from Brookhaven to PMD within 30 days of PMD’s completion of the tank. After beginning performance, PMD sought written assurances from Brookhaven that it had the entire $175,000 available and waiting in escrow to be paid to PMD. Brookhaven did not have this money available, but was not obligated under the contract to tender the money to PMD until 30 days after PMD completed the tank. When PMD failed to obtain written assurances that Brookhaven presently possessed and was holding the $175,000, PMD terminated performance of the tank construction project. PMD brought suit in federal district court against Brookhaven, claiming that Brookhaven improperly repudiated the contract by failing to provide written assurances to PMD. Brookhaven counterclaimed for damages from PMD’s repudiation. The trial court awarded damages to Brookhaven, and PMD appealed.